[Featured Stock] LG Electronics Rallies Over 9% on Treasury Share Cancellation Hopes

LG Electronics shares were strong on the Korean stock market on the morning of the 26th. After the third amendment to the Commercial Act passed the National Assembly, buying interest appears to have concentrated on LG Electronics, which had preemptively announced a plan to cancel its treasury shares.

As of 9:26 a.m. on the same day, LG Electronics was trading at 145,800 won per share, up 9.38% from the previous session. From the market open, the stock showed a double-digit gain and also renewed its 52-week high.

The third amendment to the Commercial Act, centered on the mandatory cancellation of treasury shares, passed the National Assembly plenary session on the afternoon of the 25th. The amendment stipulates that newly acquired treasury shares must be canceled within one year, and existing treasury shares already held must be canceled within one year and six months. Earlier, on the 12th, LG Electronics decided on a capital reduction by canceling all of its treasury shares.

In addition, expectations for earnings appear to have boosted investor sentiment, as LG Electronics' competitiveness in physical artificial intelligence (AI) has recently expanded and synergy effects are being seen across its overall business. Daishin Securities recently estimated that LG Electronics' first-quarter operating profit will increase by 28% year-on-year to 1.61 trillion won, beating the consensus by 17.5%. Along with this, it raised its target price by 14.3% from the previous level to 160,000 won.

Park Kangho, an analyst at Daishin Securities, said, "The preemptive efforts to improve the business structure by segment in 2025 will lead to expanded profitability in 2026," adding, "A re-rating is needed given the undervalued valuation." Park added, "The upward revision of first-quarter earnings reflects the expansion of the AI physical business, and we believe there is substantial upside potential for the share price."